The State Bank of Vietnam (SBV) would not subsidise restructuring costs of any credit institutions, Nguyen Van Binh, Governor of the central bank said via email on December 29, the Saigon Times reported.

Credit institutions will be assessed, classified into groups of “healthy”, “temporary lack of liquidity” and “weak”. Weak commercial banks, which are likely to adversely affect the whole system, will be prioritised for restructuring. In case these banks fail to recover, they will be eliminated from the market.

In addition, the central bank will support credit institutions with temporary liquidity shortage. These banks will also be asked to reorganise and consolidate their operations to become safer and healthier.

The central bank also voiced to encourage local lenders to carry out merger, acquisition, consolidation deals on voluntary basis.